The Central Bank of Nigeria (CBN) has reported that Bank deposits between February 2020 and February 2021 rose by N6.95 trillion.
This was contained in a report on some of the personal statements of members of the Monetary Policy Committee.
It also revealed that broad money supply (M3) declined in January 2021 due to the fall in net domestic assets of depository corporations.
According to CBN, net foreign assets of the banking system grew by 1.3% to N7.22 trillion at the end of January 2021.
The statement read in part: “However, there were moderate declines in returns on equity and returns on assets and a significant rise in the share of operating incomes in total interest incomes of Deposit Money Banks.
“All measures of bank size, total assets, credit and deposits significantly rose year-on-year. Over N4.56tn additional credit was created in the last one year, N300bn in the last one month and N6.95tn of additional deposits.”
The report stated that net domestic assets declined by one per cent, compared with a decline of 6.7 per cent in the corresponding period of 2020.
The development was due, mainly, to the reduction in CBN claims on other financial corporations and state and local governments.
“Consequently, M3 fell by 0.6 per cent at end-January 2021, compared with the decline of 2.1 per cent at end-December 2020.
“The growth in narrow money (M1) was driven, wholly, by the increase in transferable deposits, reflecting economic agents’ continued confidence in the banking sector.
“This development was buttressed by the decline in the ratio of currency outside depository corporations to M1.
“Growth in domestic claims reflected increased net lending to the central government and claims on the private sector, induced by the bank’s effort to enhance economic activities,” it said.
Net claims on the central government grew by 6.4 per cent at end-January 2021, in contrast to a decline of 4.5 per cent in the corresponding period of 2020.
The development reflected, largely, net claims of commercial and merchant banks and non-interest banks on account of increased government securities holdings.
“Credit to the private sector grew by 1.4 per cent at end-January 2021, compared with 0.1 per cent in the corresponding period of 2020,”the report added.